Sirius Shareholders Approve XM Deal
By SETH SUTEL
The Associated Press
Tuesday, November 13, 2007; 2:25 PM
NEW YORK -- Sirius Satellite Radio Inc.'s shareholders signed off Tuesday on the company's bid to acquire rival broadcaster XM Satellite Radio Holdings Inc. for $5 billion. The deal still faces close regulatory scrutiny in Washington.
XM's shareholders were also expected to vote on the deal later Tuesday, but the outcome wasn't seen as being in doubt given the obvious cost savings the combination would afford. Shareholder advisory firms have endorsed the deal.
More difficult will be getting the deal approved in Washington, where the Department of Justice and the Federal Communications Commission must both give their blessing. Several consumer groups have opposed the combination, saying it would create a monopoly that could hurt consumers.
Sirius said in a statement that more than 96 percent of the shareholder votes cast approved the acquisition. The company said it still hopes to complete the deal by the end of the year.
The FCC had originally said the two satellite radio companies couldn't combine, but that rule can be changed. Sirius and XM have argued that satellite radio now faces more competition for listeners since the boom in digital listening devices like Apple Inc.'s iPod, Internet radio and cell phones that can play music.
Sirius and XM have said that a combined company would offer listeners more pricing options and greater choice and flexibility in the channel lineups they receive.
Both Sirius and XM now offer packages of music, talk, sports and other programming for a fixed rate of $12.95 a month. Many of the music channels are commercial-free, and unlike terrestrial radio, the signals can be received anywhere in the U.S.
If the deal is approved, the companies have said they would offer pricing plans ranging from $6.99 per month, for 50 channels offered by one service, up to $16.99 a month, where subscribers would keep their existing service plus choose channels offered by the other service. It isn't possible now to pick channels one by one.
The deal calls for XM shareholders to receive 4.6 shares of Sirius for every share they own, which values XM at $16.15 a share or about $5 billion, based on current share prices.
Sirius shares rose 16 cents or 4.7 percent to $3.57 in afternoon trading Tuesday, while XM shares gained 72 cents or 5.2 percent to $14.45.